Greek debt relief ‘closer than ever’ but creditors must act: Tsipras

10 May 2017
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Greek Prime Minister Alexis Tsipras kept up his demand for debt relief from international lenders on Tuesday, saying Athens was close to securing a solution to ease its debt mountain but that creditors must meet there commitments.

Greece wants to wrap up negotiations with the lenders — the European Union and International Monetary Find — on reforms and on debt relief this month. It needs another tranche of bailout money, wants to qualify for inclusion in the European Central Bank’s bond-buying program, and seeks to return to bond markets immediately afterwards.
“We are closer than ever to a substantial solution on debt relief,” said Tsipras reiterating that Greece had already agreed to apply more austerity after its current bailout expires and it was its lenders’ turn to fulfill their promises of discussions about debt relief., according to dailytimes.

“?he ball is no longer in our court,” he told reporters referring to lenders’ statements on debt relief in past years. Despite Greece’s recent statements and a bailout review agreement at staff level, sources close to the lenders have been less optimistic seeing talks on debt relief lasting longer than May.

This is because of sharp differences between the IMF and Germany, Europe’s paymaster, over the Greece’s fiscal targets. The former says Greece’s target and debt are unsustainable; the latter, with an election coming, is less willing to drop its hard line. After six months of tense talks, Athens and the lenders reached a deal last week on a set of additional reforms the country needs to implement in 2019-20, two years after its current, 86-billion euro bailout program expires.

Greece wants euro zone finance ministers to approve the reforms’ deal at a scheduled Eurogroup meeting on May 22 — a key condition for unlocking vital loans — but also agree on a formula to make its debt sustainable in the medium-term and long term.

Debt sustainability is key for the European Central Bank and the Washington-based IMF, which participated financially in the country’s first two rescue packages, but has yet to announce whether it will join Greece’s current program, the third since 2010.

Greek lawmakers are expected to vote on the new austerity package by May 18, before euro zone finance ministers assess the country’s progress.

Tsipras, who is sagging in opinion polls and whose term expires in 2019, controls 153 lawmakers in the 300-seat parliament and he is expected to pass the bill. But the delays in the negotiations have slowed projected economic growth and have exacerbated reform fatigue after seven years of austerity hurting the government’s popularity further. Asked whether he was considering a cabinet reshuffle, Tsipras ruled it out. “We are not considering it. Our aim now is to speed up work as much as we can,” he said during a visit at the education ministry, where he announced a planned education reform.

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